Paraguay business setup summary

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Advantages of Paraguay company registration

A Paraguayan limited liability company can be incorporated with 2 shareholders and one director, who can be of any nationality but must be resident in Paraguay. There are no minimum share capital requirements; however, the capital deposited must be adequate to meet the business requirements of the company;

Healy Consultants’ Clients find Paraguay a great place to incorporate because:

Paraguay is one of the leading growth economies in the world with i)4.4% GDP growth in 2014, among the highest in South America ii) a 3.1% inflation rate iii) the second lowest public debt rate in Latin America and iv) an expected national economy growth of 4.0% in 2016;

Foreign investment is encouraged and welcome in Paraguay. The government guarantees equal treatment of both local and foreign investors and allows full repatriation of capital and profits;

Foreign companies enjoy incentives offered by the Paraguayan government including i) a reduced income tax from 30% to 10% ii) a solitary tax of 0.5% on gross sales for investments in the free trade zones iii) the maquila program iv) export incentive regime.

Investments in many areas including exports will benefit from VAT exemption. The legislation acknowledges a tax credit for pre-production stages. A temporary admission program is also in place that relieves imports from import tariffs and VAT.

Interests and dividends remittance abroad is guaranteed without restrictions provided the investors comply with the set-down tax obligations by the Paraguayan legislation and the money laundering regulations.

Free trade comprising of i) the freedom to manufacture and market overall goods and services, ii) pricing freedom, except for regulated products such as pharmaceuticals, iii) freedom to import and export goods and services except those prohibited by law.

The Paraguayan Free Trade Zones Laws offer a most comprehensive foreign investments legal systems including i) no need for approval by the government for investors to venture into business, ii) no limitations, restrictions or discriminations except for the border security laws.

Investors can enjoy absolute exemption from all the taxes that are applicable to registration, formation and recording of companies and corporations.

Businesses in Paraguay are exempt from all the charges and taxes relevant to transactions of foreign exchange coming about because of operations or capital contributions contemplated in investment undertakings.

Investments in Paraguay enjoy absolute exemption from all the levies and taxes on fees and interests remittance in relation to foreign loans for the entire loan term, as long as i) the loans are a minimum of US$ 5million and ii) the lending financial institutions are recognized by the government.

Entrepreneurs enjoy exemption from all the applicable dividend and profits generated taxes by the investment undertaking for a period not more than 10 years provided that i) the investment is exceeding US$5 million and ii) the taxes paid in Paraguay are not given a consideration of tax credit in the country where the investment originates.

Under the Paraguayan 60/90 law companies are granted exemption from specific internal levies, customs duties, and relevant levies on the importation of capital goods.

Paraguay is an excellent destination for agribusiness companies since it offers a range of agricultural opportunities, such as

availability of skilled and affordable agricultural labour force in the country.

Disadvantages of Paraguay company registration

Our Clients will find it difficult to incorporate a Paraguayan limited liability partnership because; A Paraguayan LLC can only be formed by a minimum of two individuals after a formalization of a contract of incorporation that takes the form of a public deed. The directors are required by law to be temporary or permanent residents of Paraguay;

Although there is no minimum share capital requirement when starting a business, the process is still expensive and time consuming, with the licensing process taking more than a month to complete;

Conducting business in Paraguay can be challenging for English-speaking foreigners given that i) the two official languages in Paraguay are Guarani and Spanish ii) official documents must be translated to the said languages iii) important government websites are primarily built in Spanish;

The government-owned companies always have monopoly of lucrative sectors like the petroleum industry and hydro-generated electricity markets;

The capital markets in Paraguay remain mostly underdeveloped due to lack of efficient legal frameworks required to create a more dynamic financial sector;

The World Bank has ranked Paraguay negatively at 100th out of 189 jurisdictions in its annual Doing Business Survey for the year 2016;

Payment made overseas under contracts of lease are subjected to withholding taxes of 10% Value Added Tax and 6% Corporate Tax;

Limited Liability Companies in Paraguay are not permitted to engage in insurance, banking or savings and loans businesses. Instead, these businesses must be done through an SA public company (which may be unlisted);

There is widespread corruption in Paraguay that makes businesses suffer from red tapes and bureaucratic hurdles. Moreover, bribery is a common norm in the country. Consequently, Paraguay has also been ranked 132nd (out of 180 countries) in the Corruption Perceptions Index 2018.

Company registration

Time to incorporate: Ten weeks

Cost to set up: US$12,850

Minimum capital: None

Physical office required: No

Required appointments

Shareholders: 2

Directors: 1

Company secretary: No

Resident director: Yes

Key facts

Corporate tax rate: 10%

Corporate tax base: Territorial

Shelf companies: No

Main company type: SRL

To help us engineer the optimum Paraguay corporate structure, please complete the 3-minute questionnaire below; then press the submit button below.

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Company purpose?

Will the LLC be a trading company or a holding company?Will the entity be a subsidiary of a foreign company?The LLC will be tax resident? Having local customers and local staff and local suppliers?The entity will receive investment income or professional services fees or sales from trading with multi-national customers?Is double taxation treaty access important?Do you need our help to legally minimize your international tax obligations?Do you need our help to increase e-commerce sales (click link)?

Company structure?

Will the shareholders be individuals or corporate?In what country do you require a corporate bank account? Refer to this web page (click link) for ideasDo you need multi-currency corporate visa debit cards?Do you need a resident director?Nationality of shareholders and directors?Expected annual sales and net profits?Does the entity need a special regulatory license or import or export license?Additional comments?

Tell us about your existing business?

Name of your existing company?Your business web site address?What products and services does your company supply?How many years are you operating this business?Is your Firm regulated by a Government agency?In what country are the majority of your customers?In what country are the majority of your suppliers?

Tell us about you?

Your name?Your email address?What country are you based in?Specifically, what deliverables (click link) do you need?What is your US$ budget for the services you need?What does quality customer service mean to you?

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For now, do you prefer Healy Consultants PLC staff to phone you, or just email reply you with some corporate solutions?If a phone call, on what number can our senior Consultant call you?If an email, what email address can our Consultant email you at?What is your preferred date and time for a phone call?In what language do you prefer we communicate with you?What matters would you like to discuss during the call; the agenda?

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Testimonial

“Pirster Pte is happy with the work that Healy Consultants undertook for the company. International incorporation can be fraught with opacity, anxiety and vulnerability - especially if it is being done remotely as we did. Healy Consultants worked really hard to make it transparent, straight forward and confidence-inspiring. I look forward to working with Healey Consultants again on future work and happily recommend them to others.”

Fiona Thompson, Managing Director Pirster Pte.

“We had taken Healy Consultants assistance in incorporating our entities in some of the complicated jurisdictions. Their approach right from the beginning has been very systematic, clear and efficient. It has been a pleasure to work with all of them.”

“Thank you Healy Consultants for swiftly project managing my engagement. From the moment I met you in Singapore Healy Consultants attended to my requirements and specific needs. I am more than satisfied with your service. Moreover, your weekly updates allowed me to continue to focus my attention on my global business while trusting you to deliver as promised.”

“Thank you Healy Consultants, you were instrumental in setting up of my Hong Kong based company, the whole process was completed in a professional and timely manner.”

Terry Skews, CEO Brittany Offshore Limited

“Healy Consultants, a professionally managed firm with clear understanding and knowledge about what client expects from them and delivers the same in a professional and timely manner. Kudos to their team.”

“Incorporating any company is comparable to setting the foundation blocks of your new company building, which you aim to build in the best location available. By choosing Healy Consultants you are laying the perfect foundations.”

“The one word that defines Healy Consultants is perfect professionalism. If you have Healy to set up your business abroad, you could focus on the operational overhead and let Healy take care of the rest. From Incorporation to Taxation, it’s a one stop solution. Rest assured, you will have the best people in the Industry working for you and providing you with the best possible information and suggestions.”

Raja Chakraborty, Director Streamlyn Pte. Ltd.

“Thank you Healy Consultants for successfully project managing our business set up in Kuwait, Lebanon, Qatar and Bahrain.”

“When it was time to establish a Space Academy in Singapore, TriVector needed a knowledgeable firm that could not only help us establish our infrastructure, but could also advise on the local and regional business climate. Healy was that firm, which is why we've been satisfied Healy Consultants for almost five years now.”

Timothy F Kauffman, CEO Trivector Services

“Finding the right partner was critical for VESL’s expansion in Asia and working with Healy Consultants has made this possible.”

“Healy Consultants were instrumental in the set up of our company. They have continued to provide exceptional support and advice over the years.”

Susan Gunnery, Managing Director Qudoss Group

“Healy Consultants is the best firm that we have ever worked with. Through our entire business relationship we were satisfied with provided level of quality and services. Healy Consultants have been responsive and detail oriented which has allowed us to stay focused on our business and not getting distracted with small details.”